October 19, 2021

Friday Footnotes: Deloitte Gets Tattled On; KPMG Kuts; We Want Jobs! | 2.5.21

Deloitte in hot water in China after an employee makes a PPT exposing alleged accounting violations [Global Times] According to the PPT, which has been circulating on China’s twitter-like Weibo, when Deloitte was auditing the financial data of its client RYB Education in 2017, a member of the auditing project told the whistleblower “not to be so careful and fill in the numbers randomly” when the latter questioned why many of the date and cash volume recorded in auditing working papers are not in line with the facts. The member also confessed to have “fabricated” many such figures in past audits, the whistleblower said.

KPMG considers cutting office space as part of WFH plans [Private Equity News] Bill Michael, the UK chair of KPMG said the firm could reduce its office space as part of a new plan for permanent hybrid working post-pandemic.

Covid-19 Tested Our Strategy At PwC US—And It Didn’t Win. Here’s Why. [Chief Executive] Tim Ryan writes: Covid-19 has been a case study in how investments in digital transformation can prepare businesses to adapt with agility at a moment’s notice without missing a beat — and for the business I lead, that was certainly the case.

Yellen picks notable experts to join the US Treasury’s digital tax talks [International Tax Review] “This is a big deal, it’s like Janet Yellen actually means business by building up the tax team more quickly than other areas of the Treasury,” said one vice president of global taxes at a US multinational consumer goods company involved in the OECD discussions. “We should not be surprised with the personnel that are coming in, and yet, it is still impressive.”

New standards continue drive toward better audits [Journal of Accountancy] The changes emerging for audit firm quality management standards may pose implementation challenges for firms that are comparable to those caused by Section 404(b) of the Sarbanes-Oxley Act for audit clients a generation ago, according to KPMG’s Christian Peo, CPA.

When Client Relationships Don’t End Amicably [The CPA Journal] A case study in CYA.

Employers added 49K jobs in January, including 3.8K in accounting [Accounting Today] “Going into January we should start to see greater accounting roles being added simply because we’re going into tax season,” said Phil Noftsinger, executive vice president at CBIZ, a Top 100 Firm. “This year, so far we don’t have any delays to the filing deadline, although that could occur. Overall, though, what you’re seeing is the length of the pandemic, job losses as a result of companies running out of the steam, and the need for continued fiscal support for small businesses and individuals. With case counts coming down and vaccines rolling out, I think all of us can start to see light at the end of the tunnel here, but it’s going to be a little bit longer. After we get case counts coming down to where we feel more comfortable, there’s still an element of fear among some of the population as things reopen. It’s not like everybody is going to go and run out to Disney World.”

CEO Sentenced for $150 Million Health Care Fraud and Money Laundering Scheme [DoJ] The CEO of a Texas-based group of hospice and home health entities was sentenced today to 15 years in prison for falsely telling thousands of patients with long-term incurable diseases they had less than six months to live in order to enroll the patients in hospice programs for which they were otherwise unqualified, thereby increasing revenue to the company.

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